WHAT, WHY, HOWEMPIRICAL, ETHICAL, AND POLITICAL APPROACHES TO CLIMATE CHANGE

ELKIN ISAAC SYMPOSIUM

APRIL 23, 2009

NATHAN DE WINKLE

THE QUESTIONS

• WHAT are the effects of CO2 emissions, and the global trends?

• WHY is this an issue we need to be faced?

• HOW can the world and its governments do to address the problem?

THE TREND

THE EFFECTS

• Seasonal shifts

• Flooding

• Crop failure

• A new ice age

THE ASSESSMENT

• “Taken as a whole, the range of published evidence indicates that the net damage costs of climate change are likely to be significant and to increase over time.” (IPCC 2007)

WILL IT CHANGE

• CO2 is emitted by nearly every human activity

• Environmental protection is a normal good

– SO2 in the United States

• The Environmental Kuznets Curve

ENVIRONMENTAL KUZNETS CURVE (EKC)

• Original theory was by Simon Kuznets in 1955

• Adapted for the environment by Thomas Panayotou in 1993

• Predicts an “inverted-u” relationship between GDP and level of a polutant

RESULTS: GERMANY2

2.5

33

.54

pce

mit

1950 1960 1970 1980 1990 2000Year

GOAL OF RESEARCH

• Test the EKC as it relates to CO2 emissions.

• See if any nation has begun to lower their emissions.

• Determine if there is a global GDP threshold for an emissions turning point

[

PREVIOUS RESEARCH

• Arrow, et al; Stern, 1998; Stern & Common, 2001– Need to take policy decisions into account for

CO2

• Schalesse, 1998– There is evidence for EKC with CO2

• Moomaw, 1997; Cole, 2003– “No Income Determinism for CO2 Emissions”

– Thus EKCs have little predictive power

THEORETICAL MODEL

• CO2= f (GDP)

• CO2t = B1 + B2(GDPt) + B3(GDPt2)

+B4(GDPt3) …+By(GDPt

n)

EMPIRICAL MODEL

• Add indicator variables to control for historical events

– E.g. US presidential administrations

– The reform and opening up in China

DATA

• 5 countries– US, Germany, India, Brazil, China

• Left hand side variable– Per Capita Emissions: 1950-2004

• From Carbon Dioxide Information Analysis Center at Oak Ridge National Laboratory

• Right hand side variable– Per Capita GDP: 1950-2004

• From the Penn World Table v. 6.2

10

15

20

25

30

35

pcg

dp

1950 1960 1970 1980 1990 2000Year

ADJUSTMENTS

• Need to be preformed to avoid auto-correlation:

• So applied a first differencing model

RESULTS

Country EKC?

GDP level for

Peak Emissions Reached?

United States Yes $42,912.00 No

Germany Yes $22,186.00 Yes

Brazil Yes $6,468.00 Yes

China No - -

India No - -

INDICATOR VARIABLES• US

– Presidential administrations• Carter (76-80)• Reagan/ G. H.W. Bush (81-92)• Clinton (93-00)• G. W. Bush (01-04)

• Germany– Reunification (1991)

• China– Political/ Economic changes

• Economic Reform & opening up (1980)• WTO membership

• Brazil– Switch to Ethanol (1975)

• India– The first trans-pacific fiber optic line (1994)

IMPROVED EXPLANITORY POWER

COUNTRY EXPLANATORYPOWER: ORIGINAL

EXPLANATORY POWER: INDICATOR

United States 48.94% 59.89%

Germany 21.94% 44.24%

Brazil 8.23% 15.71%

China 47.50% 52.73%

India 4.31% 6.84%

US4

4.5

55

.56

pce

mit

1950 1960 1970 1980 1990 2000Year

CARTER

REAGAN BUSH I

CLINTON

BUSH II

GERMANY2

2.5

33

.54

pce

mit

1950 1960 1970 1980 1990 2000Year

REUNIFCATION

CHINA-.

1

-8.9

4e

-09

.1.2

.3.4

dp

cem

it/d

pcg

dp

1950 1960 1970 1980 1990 2000Year

dpcemit dpcgdp

REFORM & OPENING UP

WTO MEMBERSHIP

INDIA0

.1.2

.3.4

pce

mit/

Fitt

ed

va

lue

s

500 1000 1500 2000 2500 3000pcgdp

pcemit Fitted values

CONCLUSIONS FROM STATS

• While CO2, does follow the path of an EKC there is no simple casual relationship between GDP and emission levels.

• However, political and other historical events explain a countries emission pattern

WHY SHOULD I CARE

• The harm principle

• Polluting a Global Commons

• We are responsible for the problem

WHAT MUST BE DONE

• Realize that there is a problem, and take ownership of the caused harm

• This international problem requires an international conclusion

– Problems with Kyoto

• We need a true cap on emissions, and penalties for non compliance

WHAT DOES THIS LOOK LIKE?

• Cap and Trade, on local and international level

• Taxes

• Acting locally, know where your energy is coming from and what harms you are causing

“Think Globally and Act Locally”-Bill McKibben

THANK YOU

Special thanks to:Dr. Jahn HakesDr. Gene ClineMy parentsMy friends All of you